Baumgardner Company's bank statement from Last National Bank at August 31, 2010, shows the following information.
Balance, August 1st $17,400
August Deposits 73,110
Checks cleared in August 71,500
Balance, August 31st 25,932
Bank Credit Memoranda:
Collection of Note
Recievable Plus $130
Interest $6930
Interest Earned 32
Bank Debit Memoranda:
Safety Deposit Box Rent 40
A summary of the Cash account in the ledger for August shows: Balance, August 1, $16,900; receipts $77,000; disbursements $73,570; and balance, August 31, $20,330. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,000 and outstanding checks of $4,500. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were tow errors involving company checks drawn in August;
(1) A check for $240 to a creditor on account that cleared the bank in August was journalized and posted for $420 . (2) A salary check to an employee for $275 was recorded by the bank for $278.
Instructions
- Prepare a bank reconciliation at August 31.
- Journalize the adjusting entrees to be made by Baumgarder Company at August 31. Assume that interest on the note has not been accrued by the company.